The FCA has banned two former directors of advice firm TailorMade Independent, which advised clients to invest over £110m in unregulated investments.
Lloyd Pope has been fined £93,800 and Peter Legerton would have been fined £84,000 if it were not for his financial position.
TailorMade gave advice on transferring pensions into unregulated investments such as green oil, biofuels, farmland and overseas property via Sipps.
Between 2010 and 2013, 1,661 customers invested £112.4m in these products.
More than half of the firm’s customers invested in overseas property operated by the Harlequin group of companies, which are under investigation by the Serious Fraud Office.
The FCA found Pope and Legerton failed to ensure TailorMade assessed the suitability of investments made through Sipps for its customers, failed to ensure the firm identified and managed its conflicts of interests and failed to oversee properly its compliance function, which had been outsourced to external consultants.
Legerton also benefited financially from poorly managed conflicts of interest between TailorMade and an unregulated firm that introduced new business to TailorMade.
During the relevant period Legerton’s total income from TailorMade was £300,567.
TailorMade has ceased trading and is now in liquidation. The Financial Services Compensation Scheme is investigating claims by its customers after declaring the firm in default in July.
FCA acting director of enforcement and market oversight Georgina Philippou says: “Pope and Legerton exposed customers to risky investments without considering if these products met their needs.
“Their actions mean many customers face losing all of their hard earned pension funds and fell woefully short of the standards we expect of senior individuals.”
In March 2013, the FCA imposed restrictions on TailorMade around the disposal of assets and prevented the firm from carrying out new pensions business.